Canadian Centre for Economic Analysis

The Economic Impact of Canadian P3 Projects: Why building infrastructure ‘on time' matters

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This report brings a fresh approach to analyzing the economic impacts of Canadian public-private partnerships (P3s) and adds to the conversation around P3s by quantifying – beyond the benefits traditionally outlined – the significant economic value from delivering such assets for public use sooner.

Using CANCEA’s award-winning computer platform – Prosperity at Risk (PaR) – and project-level data from the Canadian Council for Public-Private Partnerships (CCPPP), the report investigates the economic impacts of 200 Canadian P3s that have at least reached ‘financial close’ (i.e., they will soon start construction, are under construction, or construction is complete) since 1993. The total agreement costs for these projects exceed $110 billion.

Previous CANCEA research has highlighted that the building of infrastructure itself is important, but the value of the asset itself is realized when it is built at the right scale, in the right place, and at the right time. If procurement stands in the way of delivering or enabling a vital public service at that time, then the economy suffers. By evaluating the economic importance of such timing certainty, this report highlights the added value the P3 approach can bring.

The report finds that, taken together, a one-year delay for a typical infrastructure portfolio of $100 billion reduces its 30-year value by the equivalent of nearly 10% of the total project value. This economic boost is of a similar magnitude as the more traditional ‘value-for-money’. This proves that much of the (previously unquantified) benefit of P3s are in the delivery of large and complex projects on time.